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Finding #SA2024-002 Compliance with Grant Documentation Requirements Assistance Listing Number: 21.027 Assistance Listing Title: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Name of Federal Agency: Department of Treasury Pass Through Entity: California State Water Resources Control Board Federal Award Identification Number: A-00216-01 Criteria: The California Extended Water and Wastewater Arrearage Payment Program Guidelines include the following requirements: • Section F.2.1, Notification to Customers requires that the City must make best efforts to notify customers that they have applied for arrearage assistance from the State Water Board, and that this funding may be applied to customer debt accrued during the COVID-19 pandemic relief period, or the modified COVID-19 pandemic relief period, whichever is appropriate. Best efforts include notices on internet webpages, notices on social media sites, and signage at offices or payment centers. The modified COVID-19 pandemic relief period is the period beginning with the first billing period on or after June 16, 2021, that does not contain June 15, 2021, to December 31, 2022, inclusive, and includes any customer billing period that includes these dates. Condition: We selected forty customer credits (water and wastewater) for testing of the documentation of the date the credit was calculated. Although we understand the City calculated the customer arrearages and credits to be applied based on the total amount due from June 16, 2021 through December 31, 2022, City staff was unable to locate documentation to show the actual dates the credits were calculated for each customer and how the credits applied were calculated. Cause: We understand that the documentation of how the customer credits were calculated, including the period covered by the credit, could not be located due to staff turnover and due to the approach of the adjustments being entered manually into the system by one staff member. Questioned Costs: We question costs of $660,387, which consists of the amounts charged to the Arrearage Program, because we were unable to verify the dates the credits were calculated. Effect: The City is not in compliance with the terms and conditions of the California Arrearage Payment Programs related to Notification of Customer Credits and Payment Plans. Recommendation: The City should determine if reports can be generated from the utility billing system to show the amounts due from the customers during the eligible period of June 16, 2021 through December 31, 2022 and how the customer credits were calculated. In addition, the City must develop procedures to ensure compliance with all grant award terms and conditions and retain documentation to demonstrate such compliance until the grantor has closed-out the grant award program. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.